What is the accounting Period?
- HRMS (HR & Payroll) July 21,2020
An accounting period is the span of your time covered by a group of monetary statements. This era defines the time range over which business transactions are accumulated into financial statements, and is required by investors in order that they will compare the results of successive time periods. For internal financial reporting, an accounting period is usually considered to be one month.
A couple of firms compile financial information in four-week increments, in order that they need 13 accounting periods per annum.
Whatever the accounting period is employed should be applied consistently over time. It’s the amount that books are balanced and therefore the financial statements are prepared. Generally, the accounting period consists of 12 months. However, the start of the accounting period differs consistent with the jurisdiction.
For instance, one entity may follow the regular civil year, i.e. January to December because the accounting year, while another entity may follow April to March because of the accounting period.